Understanding the Climate Action Regulation

How effective will the EU’s largest post-2020 climate tool be?

Introduction

The Climate Action Regulation (CAR), also known as the Effort Sharing Regulation, is Europe’s tool to reduce the climate impact of sectors not covered by the EU Emissions Trading System (EU ETS). Covering 60% of the EU’s greenhouse gas (GHG) emissions, the law sets binding national emission reduction targets for the 2021-2030 period for sectors such as transport, buildings, agriculture and waste.

The CAR sets the pace of decarbonization of the sectors it covers, but its effectiveness as a climate instrument will depend on the policies adopted by each Member State that should enable the transition to net-zero societies. In the coming months, Member States will develop National Energy and Climate Plans (NECPs), in collaboration with stakeholders, to show how they plan to meet their climate commitments.

This policy briefing sets out what has been decided in the Climate Action Regulation and what it means for future climate policy in different EU countries.